If the entries in Stories from Hans Christian Andersen (see review above) dilute the headiness of their models, this volume presents a close-to-pristine translation of one of Andersen's most popular works along with highly charged and rather adult illustrations. The mid-19th-century translation by Mary Howitt (a friend of Andersen's) fully embraces the story's sense of yearning, courage and tragedy. Only minor changes have been made, according to a publisher's note, chiefly, ``eliminating some brief passages of heavily detailed description and moralizing.'' The prose here tends toward a somewhat removed elegance as opposed to a homely, conversational style. The art, however grand and lush the palace scenes, verges on the lurid when Santore trains his brush on the mermaid. She is eroticized, much like the figures in Charles Micolaycak's Orpheus. Young mermaid fanciers might do better with Mary Pope Osborne's Mermaid Tales from Around the World (reviewed June 28). Ages 8-up. (Sept.)